Only one thing matters in today's economic docket: an overly priced-in NFP beat. Whisper number now is at 140k even as the median forecast has pushed up just modestly to 105K. The reason is that the key Wall Street banks are well above the median, and for some reason they are the ones that matter. Citi's Steve Englander summarizes the data as follows: "
About 20% of the forecasters polled by Bloomberg changed their forecasts today and the median forecast for those with a July 7 timestamp is 125K vs. 100K for those with a July 6 or earlier timestamp. So the true consensus is probably somewhat above the median of 105K that includes both revised and unrevised forecasts. Citi expects 100k, private sector jobs forecasted to rise 130K. The range for the July 7 forecasts is 85K to 175k and is well distributed in this range. It is probably the case that an above 150K outcome will be regarded as a positive surprise and below 115K as a negative. The rates moves of a couple of bps higher in – and 10-year yields is consistent with a modest upside shift in expectations but no wholesale change."
Full data docket from Goldman:
8:30: Employment Report (June): Stronger growth. The June labor market report is likely to be considerably stronger than its predecessor. We expect a gain of 125,000 nonfarm payrolls, with risk tilted to the upside, and a decline in the unemployment rate to 9.0%. The Bloomberg median consensus for total payrolls is currently 105,000, up from 90,000 last week. The average of forecasts updated yesterday—after a better-than-expected ADP report—is 126,000.
Most labor market indicators have been stable or better in recent weeks. New jobless claims ranged between 418,000-432,000 for seven weeks, job advertising has held at reasonably robust levels, the employment indexes in both of the ISM surveys improved (albeit only marginally for the non-manufacturing index), and the ADP report on private-sector employment growth was much firmer. In addition, several special factors likely held back job growth in May, including disruptions in the motor vehicle sector, inclement weather, and technical factors related to the timing of the payroll survey. These factors likely reversed, implying better results for June.
Payrolls: GS: +125k; median forecast (of 85): +105k, ranging from +40k to +175k; last +54k.
Unemployment: GS 9.0%; median forecast (of 83): 9.1%, ranging from 8.9% to 9.2%; last 9.1%.
Earnings: GS +0.1%; median forecast (of 54): +0.2%, ranging from +0.1% to +0.3%; last: 0.3%.
10:00: Wholesale inventories (May). The May wholesale inventories report may have implications for our “bean count” estimate of Q2 GDP.
Median forecast (of 32): +0.6%; last +0.8%.
15:00: Consumer credit (May): Steady growth. Consensus forecasts expect that consumer (non-mortgage) credit increased for an eighth consecutive month in May. Recent growth in consumer credit has been driven by “non-revolving” debt, such as auto loans. Credit card borrowing has continued to decline.
Median forecast (of 36): +$4.0bn; last +$6.2bn